Updated

Japan's military may form a new unit to monitor Chinese naval operations, a move to counter what many Japanese strategists see as an increasingly aggressive stance by Beijing in the East China Sea.

The unit would consist of about 200 troops based on remote Yonaguni Island, which is on Japan's western fringe near Taiwan, and would primarily be tasked with radar monitoring of Chinese naval operations in the area, according to a report in the Yomiuri newspaper.

The report quoted unnamed Defense Ministry officials as saying a budget for the unit would be formally submitted soon. Ministry officials contacted by The Associated Press on Thursday said they could not comment on specifics because the plan was still under discussion.

The ministry has confirmed, however, that it is considering bolstering military monitoring capabilities in the country's southwestern islands.

Tokyo is deeply concerned over the growth of the Chinese navy and its posture in the East China Sea, where the two countries have conflicting territorial claims.

Relations between Beijing and Tokyo have soured recently because of an incident in which a Chinese trawler collided with two Japanese coast guard patrol ships in waters near disputed islands called the Diaoyu or Diaoyutai in Chinese and Senkaku in Japanese.

The islands are controlled by Japan but also claimed by China. Located 120 miles (190 kilometers) east of Taiwan, the islands are surrounded by rich fishing grounds and are regularly occupied by nationalists from both sides.

After the Sept. 7 collision, China demanded an apology and compensation, but Tokyo countered by demanding that Beijing pay for damage to the patrol boats.

Beijing cut off ministerial-level contacts with Japan, repeatedly called in Tokyo's ambassador to complain, and postponed talks on the joint development of undersea natural gas fields. China also quietly halted exports to Japan of rare earth elements, which are essential for making high-tech products.

Japan's Prime Minister Naoto Kan said Monday he will discuss the dispute if he meets with Chinese President Hu Jintao at the Asia-Pacific Economic Cooperation summit, which Japan is hosting this weekend.

Hu is to attend the summit, but Beijing and Tokyo have yet to confirm that Kan and Hu will hold talks.

China has already rejected an offer by U.S. Secretary of State Hillary Rodham Clinton to broker three-way talks with Japan over the islands.

Clinton said Washington has no position on which country holds ultimate sovereignty over the islands.